Datang Intl H Regulatory News (DAT)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limitedtake no responsibility for the contents of this announcement, make no representationas to its accuracy or completeness and expressly disclaim any liability whatsoever forany loss howsoever arising from or in reliance upon the whole or any part of the contentsof this announcement. Datang International Power Generation Co., Ltd. (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 00991) ANNOUNCEMENT CONNECTED TRANSACTION ENTRUSTED LOAN AGREEMENT On 24 April 2014, the ninth meeting of the eighth session of the Board considered andapproved the provision of the Entrusted Loan of not more than RMB1.5 billion toXilinhaote Mining Co.. On 13 May 2014, the Company entered into the Entrusted LoanAgreement with Datang Finance Company and Xilinhaote Mining Co. in relation to theprovision of the Entrusted Loan by the Company to Xilinhaote Mining Co. in the form ofrevolving loan facility through the Entrusted Loan Arrangement, in which Datang FinanceCompany acts as the lending agent. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC together with its subsidiaries holdsapproximately 34.71% of the issued share capital of the Company. Xilinhaote Mining Co.is owned as to 60% and 40% by the Company and CDC, respectively. Datang Finance Companyis a subsidiary of CDC. Both Xilinhaote Mining Co. and Datang Finance Company aretherefore connected persons of the Company and the transaction under the Entrusted LoanAgreement constitutes a connected transaction of the Company under Chapter 14A of theListing Rules. As all of the applicable percentage ratios (as defined in Rule 14.07 of the ListingRules) for the principal amount of the Entrusted Loan under the Entrusted Loan Agreementis more than 0.1% but less than 5%, the Entrusted Loan Arrangement and the EntrustedLoan Agreement are subject to the reporting and announcement requirements under Chapter14A of the Listing Rules, but do not require the approval by the independent Shareholdersof the Company under Chapter 14A of the Listing Rules. ENTRUSTED LOAN AGREEMENT Date and Subject Matter On 24 April 2014, the ninth meeting of the eighth session of the Board considered andapproved the provision of the Entrusted Loan of not more than RMB1.5 billion toXilinhaote Mining Co.. On 13 May 2014, the Company entered into the Entrusted LoanAgreement with Datang Finance Company and Xilinhaote Mining Co. in relation to theprovision of the Entrusted Loan by the Company to Xilinhaote Mining Co. in the form ofrevolving loan facility through the Entrusted Loan Arrangement, in which Datang FinanceCompany acts as the lending agent. Parties 1. The Company, as the lender; 2. Datang Finance Company, as the lending agent; and 3. Xilinhaote Mining Co., as the borrower. MAJOR TERMS OF THE ENTRUSTED LOAN AGREEMENT 1. Entrusted Loan Arrangement Pursuant to the Entrusted Loan Agreement, Datang Finance Company is designated by the Company to act as a lending agent to provide the Entrusted Loan to Xilinhaote Mining Co. and to monitor the use and repayment of the Entrusted Loan by Xilinhaote Mining Co.. 2. Amount of the Entrusted Loan During the term of the Entrusted Loan Agreement, the total outstanding balance of loans of Xilinhaote Mining Co. under the Entrusted Loan Agreement shall not exceed RMB1.5 billion and shall be in the form of revolving entrusted loan facility, i.e. provided that the sources of funding and uses of the Entrusted Loan being in compliance with the regulatory requirements of the financial institutions, Xilinhaote Mining Co. can apply for loans on a continuous basis, regardless of the number of loans and the amount of each tranche of such loans, during the effective period of the agreement as long as the outstanding balance of the principal amount of the loans under the Entrusted Loan Agreement does not exceed RMB1.5 billion. 3. Term The term for the Entrusted Loan Agreement is 36 months commencing from 13 May 2014 and ending on 12 May 2017. 4. Interest rate At a floating interest rate, being the benchmark interest rate to be charged for the same level of loans in RMB for the same period as announced by the People's Bank of China on the date when each tranche of borrowing is withdrawn and such interest rate is to be adjusted annually. The adjusted borrowing interest rate will be the benchmark interest rate for the same level of loans in RMB for the same period announced by the People's Bank of China on the adjustment date. As at the date of this announcement, the prevailing benchmark interest rate for three-year loans in RMB as announced by the People's Bank of China is 6.15% per annum. Such interest rate is arrived at after arm's length negotiation between the Company and Xilinhaote Mining Co. in consideration of the overall reduction in capital costs to the Group after the accounts of Xilinhaote Mining Co. (being a controlled subsidiary of the Company) are consolidated into the accounts of the Company. 5. Calculation and payment of interests Interests shall be accrued on daily basis and settled on quarterly basis. The settlement date falls on the twentieth (20th) day of the last month of each quarter. 6. Handling fees The handling fees shall be charged in tranches on the date of grant of each tranche of the loan. The rate of the handling fees shall be 0.025% of the actual amount of each tranche of loan. The handling fee is determined after taking into account the handling fee charged by commercial banks on the provision of the same size of entrusted loan and the discount rate of handling fee to be offered by Datang Finance Company. Such handling fee is payable by Xilinhaote Mining Co. to Datang Finance Company on an one-off basis on the date of grant of each tranche of the loan. 7. Uses of the Entrusted Loan The loan will be utilized by Xilinhaote Mining Co. for the replacement of due borrowings and the turnover of liquid capital. 8. Repayment schedule of the Entrusted Loan Repayment of each tranche of the loan shall be made on the repayment date as set out in the specific loan agreement for such tranche of loan. 9. Sources of funding for the repayment of the Entrusted Loan Sales income and other fund of Xilinhaote Mining Co.. 10. Effective date The Entrusted Loan Agreement shall become effective when it is duly signed by the legal representatives or authorised agent of both parties and sealed with their respective chops and upon the approval of the internal authority of each of the parties (or the internal approval procedures of each of the parties have been implemented). REASONS FOR AND BENEFITS OF ENTERING INTO THE ENTRUSTED LOAN AGREEMENT In view of the cooperation history between Datang Finance Company and the Company andgiven that the provision of entrusted loan services by Datang Finance Company is coveredunder the Financial Services Agreement, Datang Finance Company has better understandingof the operations of the Company which will allow more expedient and efficient servicesthan those rendered by other PRC commercial banks. Further, the handling fees chargedby Datang Finance Company will not be higher than those charged by other PRC commercialbanks. In view of the above considerations, the Company appointed Datang Finance Company,rather than other PRC commercial banks, as the lending agent. Further, considering the capital risks control measures under the Financial ServicesAgreement and the terms under the Entrusted Loan Agreement are normal commercial termswhich confer no additional obligations nor risks on the Company when comparing withother entrusted loan agreements in the market, the Company considers that no additionalrisks will be involved by appointing Datang Finance Company as the lending agent underthe Entrusted Loan Agreement. In order to ensure the day-to-day cash flow of Xilinhaote Mining Co., the Companyintends to provide the Entrusted Loan in the aggregate amount of not exceedingRMB1.5 billion to Xilinhaote Mining Co.. The Company is of the view that the EntrustedLoan will be primarily utilised by Xilinhaote Mining Co. to replace the due borrowingsand supplement its liquid capital, and is thus beneficial for the smooth progress ofthe production and operation activities of Xilinhaote Mining Co.. Considering the possible higher financial costs for Xilinhaote Mining Co. to obtainthe current loan from other commercial banks when comparing with the financial costsincurred by the Company to obtain the funding of the Entrusted Loan, the Companyconsiders that the overall capital costs to the Group will be relatively reduced afterthe accounts of Xilinhaote Mining Co. (being the subsidiary of the Company) areconsolidated into the accounts of the Company. The Directors (including the independent non-executive Directors) are of the view thatthe terms of the Entrusted Loan Agreement are fair and reasonable, have been enteredinto after arm's length negotiation between all parties thereto and determined onnormal commercial terms and is in the best interests of the Company and its Shareholdersas a whole. None of the Directors has material interest in the Entrusted Loan Agreement. Thoseconnected Directors, including Chen Jinhang, Hu Shengmu and Fang Qinghai, have abstainedfrom voting at the Board meeting for approval of the relevant transaction in accordancewith the requirements of the Listing Rules of Shanghai Stock Exchange. INFORMATION RELATING TO THE PARTIES OF THE AGREEMENT 1. Information relating to the Company The Company is principally engaged in the development and operation of power plants, the sale of electricity and thermal power, and the repair, testing and maintenance of power equipment as well as the provision of power-related technical services. The main service areas of the Company are in the PRC. 2. Information relating to Xilinhaote Mining Co. Xilinhaote Mining Co. is a subsidiary of the Company. It was duly incorporated on 23 August 2007 with a registered capital of RMB376 million. It is primarily responsible for the development, construction and operation of Shengli Open-cut Coal Mine East Unit 2 project. The equity holding structure of the company is as follows: 60% of its equity interest is held by the Company and 40% of its equity interest is held by China Datang Coal Industry Co., Ltd., a subsidiary of CDC. 3. Information relating to Datang Finance Company Datang Finance Company is a non-banking financial institution duly incorporated in the PRC on 10 May 2005. Its registered capital is RMB3 billion. Its principal business includes, among others, the provision of deposit services, loan services, entrusted loan services and entrusted investment services. 4. Information relating to CDC CDC was established on 9 March 2003 with registered capital of RMB18.009 billion. It is principally engaged in the development, investment, construction, operation and management of power energy, organisation of power (thermal) production and sales; manufacturing, repair and maintenance of power equipment; power technology development and consultation; power engineering, contracting and consultation of environmental power engineering; development of new energy as well as development and production of power related coal resources. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC together with its subsidiaries holdsapproximately 34.71% of the issued share capital of the Company. Xilinhaote Mining Co.is owned as to 60% and 40% by the Company and CDC, respectively. Datang Finance Companyis a subsidiary of CDC. Both Xilinhaote Mining Co. and Datang Finance Company aretherefore connected persons of the Company and the transaction under the EntrustedLoan Agreement constitutes a connected transaction of the Company under Chapter 14Aof the Listing Rules. As all of the applicable percentage ratios (as defined in Rule 14.07 of the ListingRules) for the principal amount of the Entrusted Loan under the Entrusted LoanAgreement is more than 0.1% but less than 5%, the Entrusted Loan Arrangement and theEntrusted Loan Agreement are subject to the reporting and announcement requirementsunder Chapter 14A of the Listing Rules, but do not require the approval by theindependent Shareholders of the Company under Chapter 14A of the Listing Rules. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressionshave the following meanings: "A Share(s)" the domestic ordinary share(s) of the Company with a nominal value of RMB1.00 each and are listed on the Shanghai Stock Exchange "Board" the board of Directors of the Company "CDC" China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is the controlling Shareholder of the Company pursuant to the Listing Rules which, together with its subsidiaries, own approximately 34.71% of the issued share capital of the Company as at the date of this announcement "Company" Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, whose H Shares are listed on the Hong Kong Stock Exchange and the London Stock Exchange and whose A Shares are listed on the Shanghai Stock Exchange "connected person" has the meaning ascribed to it under the Listing Rules "connected transaction" has the meaning ascribed to it under the Listing Rules "Datang Finance Company" Datang Corporation Finance Limited Company, a controlling subsidiary of CDC "Directors" the director(s) of the Company "Entrusted Loan" the revolving entrusted loan of a total principal amount of not more than RMB1.5 billion "Entrusted Loan Agreement" the entrusted loan agreement entered into on 13 May 2014 between the Company, Datang Finance Company and Xilinhaote Mining Co. in respect of the Entrusted Loan Arrangement "Entrusted Loan Arrangement" the arrangement where Datang Finance Company is appointed by the Company to act as a lending agent to grant the Entrusted Loan to Xilinhaote Mining Co. pursuant to the Entrusted Loan Agreement "Financial Services Agreement" the financial services agreement entered into between the Company and Datang Finance Company on 15 October 2013, particulars of which please refer to the Company's circular dated 5 November 2013 "Group" the Company and its subsidiaries "H Share(s)" the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange and the London Stock Exchange "Hong Kong" the Hong Kong Special Administrative Region of the PRC "Listing Rules" the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Shareholder(s)" the holder(s) of the Share(s) of the Company "Shares" the ordinary shares of the Company with a nominal value of RMB1.00 each, comprising domestic Shares and H Shares "Stock Exchange" The Stock Exchange of Hong Kong Limited "Xilinhaote Mining Co." Inner Mongolia Datang International Xilinhaote Mining Company Limited, a subsidiary of the Company, details of which are set out in the section entitled "Information Relating to the Parties of the Agreement" "%" percent By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 13 May 2014 As at the date of this announcement, the Directors of the Company are:Chen Jinhang, Hu Shengmu, Wu Jing, Fang Qinghai, Zhou Gang, Li Gengsheng, Cao Xin, Cai Shuwen, Liu Haixia, Guan Tiangang,Dong Heyi*, Ye Yansheng*, Li Hengyuan*, Zhao Jie*, Jiang Guohua* * Independent non-executive Directors